By NZPA
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Tuesday 9th July 2002 |
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Mr Milne takes the helm just as Richmond is further embroiled in further legal action to fend off attempts by South Island meat giant PPCS to take it over.
The two big meat exporters face a big showdown on August 6 in the High Court, where two potential outcomes are for Richmond to be absorbed into the South Island company, or for PPCS to take a body blow and be ordered to forfeit its Richmond stake.
Either way, the bitter row has hampered the Richmond search for a new chief executive to replace Mr Loughlin, its key strategist, who is stepping down to run his own winery.
Mr Loughlin was appointed in 1997 and steered Richmond from a provincial meat processor to multinational food company, but announced in May that he would quit in October to concentrate on his own business, Askerne Winery.
He leaves Mr Milne a challenging financial outlook as well -- in the first quarter of the current financial year, Richmond recorded a loss of $15.2 million, and in the second half profit of $13.2 million, with a similar outcome expected for the third quarter, as well as a modest loss in the fourth quarter.
Richmond's chairman, farmer Sam Robinson, said replacing Mr Loughlin permanently would be a problem while the long-term ownership of Richmond was still uncertain.
So the company's board had decided to take advantage of the availability of Mr Milne -- who last year returned to the dairy industry for eight months as a troubleshooter.
He became acting chief executive of Australia's Bonlac Foods Ltd, in the wake of Fonterra taking a 25 percent stake in the financially troubled company, and restructured it with new objectives and ownership structure. He remains a director of Bonlac Foods.
"The time-frame for the appointment of a permanent chief executive is now significantly beyond the period previously envisaged by all parties," Mr Robinson said today.
"The board recognises that it's not feasible to begin the permanent appointment process until after the shareholding issue, now before the High Court, is resolved, and there is clarity regarding the ownership of the company going forward.
"Achieving ownership clarity is critical in attracting the best and most appropriate person for the position."
Mr Robinson said that Mr Loughlin would continue as a Richmond director, and until October 31 would have special executive role initially handling the transition, and then working on specific projects such as procurement planning. Mr Loughlin apparently started that work this week with an announcement that some farmers were paying too much for their replacement livestock, apparently in a bid to talk down on-farm costs which will underpin Richmond's procurement spending next summer.
Mr Milne, whose only previous experience in the meat industry was as a knifehand in a meatworks in his student days, is well-known as a trouble-shooter in the dairy sector, notably for helping Bay Milk's disaster recovery after the Edgecumbe earthquake in 1987, and then becoming its chief executive in 1991.
And in 1997, the Dairy Board rushed him into Europe as its regional group general manager when the chief executive of the board's European holdings, Monny Verschueren (CRRCT) and five other key executives were nobbled by an ill-fated legal campaign mounted against New Zealand's butter exports.
Mr Milne's first big challenge will be to have Richmond ready for the court battle on August 6, which is expected to resolve a web of litigation most recently stemming from the sale of PPCS's shareholding in Richmond in July 2000 and the re-acquisition of that shareholding in June 2001, from Active Equities Ltd.
PPCS has been stalking Richmond since 1997, when the Meat Board put its one third holding on the market, and if it succeeds will become the country's only national meat processor in the lamb and beef sector.
But some Hawke's Bay farmers have strongly opposed PPCS from the start, claiming PPCS had a ruthless, cost-centred culture rooted in commodity-type production -- in contrast with Richmond strategy to move close to consumers with ready-to-use cuts.
PPCS chairman Jim Pringle rejected the claims, saying his company has not been a commodity trader for many years, and had developed the trade in chilled cuts as well as any other company.
Many meat industry observers point to the fact that the North Island's two month longer killing season would enable PPCS to extend supply to its European customers. Geographically diverse processing plants would also give added insurance in the event of droughts or other procurement problems.
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